An Operating System is the software which communicates with the hardware of a computer system and functions as the intermediary between all the applications and the hardware, which includes peripheral devices such as a printer, a mouse or a keyboard. When you run software, it transfers requests to the OS using an API (Application Program Interface) and the contact is done through a command line or a Graphical User Interface (GUI). Similar to a personal computer, hosting servers also use an Operating System that acts as a host for any software installed on them, which includes script apps or server-side software such as a flash server, a VOIP server, etc. A virtual machine can be created on a physical one, so you could install a guest OS on it and have a different system environment compared to the physical server host Operating System.